FINANCE MINISTERS FROM the Eurozone have agreed to change the repayment date for some of Ireland’s bailout loans.
In a statement issued in the early hours of this morning, the ministers said they had agreed in principle to change the length of time Ireland has to pay back the smaller chunk of its bailout loan from Europe – but said a final decision on extending the bigger loan would have to be made by the European Council’s financial group.
The change will make the loans cheaper overall for Ireland to pay back, and means Ireland will have to borrow less money.
A Department of Finance spokesperson told TheJournal.ie that the move was a positive development which will further enhance Ireland’s ability to emerge from the bailout programme.
The idea had first been publicly mooted in January when the Eurogroup said it would examine a possible extension to the maturities of Ireland and Portugal’s bailout loans.
Ireland had been pushing to extend the repayment period of the €17.7 billion it received from the European Financial Stability Facility (EFSF) – funded by the 17 Eurozone members – and the €22.5 billion drawn down from the European Financial Stability Mechanism (EFSM), which is funded by the European Commission.
The agreement by the ministers covers the EFSF loan but the decision on the EFSM repayment date will be made by ECOFIN ministers when they next meet.
Ireland is due to pay back its first chunk of bailout money in 2015 when €5 billion falls due to the EFSM. A further €4.19 billion is due to be paid back to the EFSF in 2016.
The change to the repayment date will also apply to Portugal, which has been adhering to the conditions of its bailout programme.
Eurogroup ministers said they were determined to support the two countries efforts to “regain full market access and successfully exit their well-performing programmes, in the context of continued strong programme implementation and compliance”.
The agreement was reached in Brussels, where ministers met to agree a €10 billion bailout package for Cyprus in a bid to save the country from bankruptcy.
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